Hyperlocals Need to Protect Their Social Media Branding

Customer lists, brand names, and social media accounts are valuable assets for hyperlocal news publishers, and they should be protected like money. PhoneDog, LLC is battling former contributor Noah Kravitz in a San Francisco Federal Court after Kravitz left PhoneDog and used a Twitter account provided by PhoneDog to promote his new endeavors to PhoneDog’s followers. Last week, the dispute over PhoneDog’s property claim in its followers heated up when a magistrate judge refused to throw out the suit.

PhoneDog provides reviews of mobile products, which includes research information and price comparisons. The company claims it attracts about 1.5 million visitors per month. PhoneDog requires its employees and agents to maintain their own Twitter accounts to tweet links directing followers to the site.

According to court documents, Kravitz served as a video blogger for PhoneDog from 2006 until October 2010. As an employee, he created a Twitter account, @PhoneDog_Noah, which eventually generated 17,000 Twitter followers. The company has alleged that it had advertising relationships with CNBC and Fox News, which gave Kravitz the opportunity to become a contributor on CNBC’s Street Sign and Fox Business Live.

PhoneDog claims that after Kravitz left PhoneDog, Kravitz changed his Twitter account handle to @noahkravitz and continued to communicate with PhoneDog’s followers to promote his services and the services of his new employer, TechnoBuffalo, a competitor of PhoneDog. PhoneDog followed up with a lawsuit against Kravitz on July 15, 2011, claiming that Kravitz took proprietary information belonging to PhoneDog and interfered with PhoneDog’s relationships with its followers and advertisers, which caused a decline in page views and advertising.

Kravitz asked the Court to throw out PhoneDog’s complaint, arguing that PhoneDog’s relationships are “speculative because they only assert that PhoneDog’s advertising revenue ‘might have’ decreased.” However, Chief Magistrate Judge Maria-Elana James would not dismiss PhoneDog’s complaint, concluding that PhoneDog provided enough facts claiming economic harm to keep its case moving forward.

“PhoneDog explicitly alleges in its first amended complaint “there is decreased traffic to the website through the Account (the Twitter account), which in turn decreases the number of website page views and discourages advertisers from paying for ad inventory on PhoneDog’s website,” Magistrate Judge James pointed out in her opinion.  The case is far from being finished, however, with no trial date scheduled.

Hyperlocal publishers can take steps to avoid PhoneDog’s dilemma. Agreements can be put in place between publishers and their editors, content creators, employees and freelancers stating that the publishers’ customer lists, mailing lists, social media follower lists, other subscriptions lists and marketing plans belong to the publishers, and may not be used except for the publishers’ business. Moreover, the Agreement should provide that any online accounts provided in connection with the publishers’ business remain with the publisher upon termination of any relationship.

This article is intended to provide general information only, and it does not provide specific legal advice.

Brian Dengler is an attorney with Vorys Legal Counsel and journalist who covers legal issues in eMedia. He is a former vice-president of AOL, Inc., a former newspaperman, and an EMMY-winning TV journalist. He teaches new media issues as an adjunct at Kent State University and formerly at Otterbein University.

  1. February 6, 2012

    Brian, while I agree that publishers “can” do this, I believe to do so is a naive and limited view of the reality of a hyperconnected universe and the power of the personal brand. Hence, just because you can doesn’t mean you should.

    People follow people, not institutional brands, so people can go places in a social world that institutions cannot. It’s smart strategy to promote personal brands, and with it comes a greater responsibility to those who are working their brands. Moreover, the network is a 24/7 medium; we cannot expect employees to work 24/7 and then rob them of the primary fruit of that labor. I believe that is against at least the spirit of labor law. 

    I advise those who’ll listen to never attach the brand of your employer to your social media efforts. If you’re forced to do it, run parallel timelines and only support your employer’s brand when you’re being paid to do so. Your personal brand is everything.

    1. Brian
      February 6, 2012

      Terry, an interesting observation. I have read many articles regarding the evolution — and importance — of personal brands. You raise some salient business points on the practicality of personal brands operating (if I understand correctly) on a parallel course with institutional brands. 

      The article doesn’t question whether personal brands are acceptable. Instead, it reports on a narrow legal issue of who owns, and what rights, the owners may have in proprietary information. PhoneDog argues that Kravitz had access to PhoneDog’s proprietary information and built his brand using such information. Whether PhoneDog will prevail is uncertain. 

      Institutional brands may have invested heavily in their subscriber lists, marketing plans, technology, customer lists and other proprietary information. Such business information may be protected by law as trade secrets, if such information is not easily accessible through public means, if the information has value to the business, and if the owner takes steps to keep the information secret. Steps to keep information secret may include locking up the information, restricting access, and granting access only to those who agree in writing to keep the information secret. Personal brands likewise can take the same steps to get legal protection for their proprietary  information. 

      Think of Coke’s formula. It’s a trade secret. These legal principles do not assess the value of “institutional” or “personal” brands; instead, the analysis is focused on whether certain business information deserves protection. 

      The issue in the PhoneDog case is not whether Kravitz can or cannot build his own brand. PhoneDog claims that Kravitz had access to proprietary information and now is using PhoneDog’s proprietary information to build his personal brand, interfere with PhoneDog’s business relationships, and causing economic loss to PhoneDog. The lawsuit is new and the fact that the court has not at this stage of the proceeding thrown out PhoneDog’s lawsuit does not mean that PhoneDog will prevail.

      The lawsuit has yet to address questions such as whether Kravitz had access to “proprietary information,” whether Kravitz ever agreed that PhoneDog’s information was proprietary, whether PhoneDog’s information deserves protection by law,  whether Kravitz built followers based on his own brand, or whether Kravitz actually interfered with PhoneDog’s business relationships.  Ultimately, these issues may not be resolved until there is a trial and a jury decides whether Kravitz or PhoneDog will prevail. 

      Needless to say, even if an institutional brand retains the use of a well known writer, blogger or contributor, it can by an agreement with such contributors require that they keep certain institutional information proprietary. On the other hand, the contributor likewise can decide, as I believe you suggest, whether or not she or he would agree to such restrictions. 

      1. February 6, 2012

        That’s correct, Brian. In this case, Phone Dog is pissed that Kravitz is now competing with them, and I believe this is going to have to be resolved in our legislatures. TV stations are in the same predicament, which is why non-compete clauses are the industry standard. All that goes out the window in a hyperconnected universe, because it demands 24/7 accountability, and unless employers are willing to pay for that, their “rights” are simply not going to hold water. 

        Moreover, the Huffington Post has done rather well by aggregating personal brands, and I believe this model scales locally, too. So I would argue that it’s smart business to aid in the growth of personal brands, and recruit the best as “employees,” regardless of how the deal is structured. Personal media is, above all, personal, and we’ve got to get used to the idea, because we can (and do) shoot ourselves in the foot by playing old world hardball in the new world.

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  3. Hanna Alex
    June 2, 2014

    Kravitz is now competing with them, and I believe this is going to have to be resolved in our legislatures. TV stations are in the same predicament, which is why non-compete clauses are the industry standard.

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Street Fight Daily: 02.06.12